The state government, on Friday, put the blame squarely on the shoulders of the Leader of Opposition N Chandrababu Naidu for the mushrooming and the strong arm tactics of MFIs.
The Andhra Pradesh Micro Finance Institutions (regulation of money lending) Ordinance, 2010 states that major microfinance players like SKS, Spandana and Share started operationalising their activities during the TDP regime.
The State government says that it is not able to comprehend whether the leader of the Opposition is in favour of or against MFIs, and said that his demand for the government to take action for waiving MFI loans will only further strengthen and promote the MFIs.
The government further stated through the Ordinance that the "All Free And Loan Mafee" slogans raised by the TDP president had lured SHGs to defer repayment, which is evident from the reduced recovery rate in the SHG-Bank Linkage portfolio, resulting in making many SHGs ineligible for Pavalavaddi entitlement.
Apart from this, defaulting of loans by SHGs held back bankers from releasing further loans to SHGs, forcing them to approach MFIs for credit support.
The government claims that it disbursed Rs. 27,399 crore from 2004-05 to date as SHG-Bank linkages, as against the Rs. 1,899 crore up to 2003-04.
It further claimed to have released Pavalavaddi to a tune of Rs. 834.25 crore till date. A new system of releasing of Pavalavaddi funds online directly from the central account to an SHG's savings bank account has also been introduced in the current year, it says.
Courtesy: INN
filed in:Chandrababu Naidu, Microfinance Institutions, TDP, SKS Microfinance